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           AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES


                            PART I:  GENERAL

                                Article 1

                         Definition of a Subsidy


1.1   For the purpose of this Agreement, a subsidy shall be deemed to exist
if:

      (a)(1)there is a financial contribution by a government or any public
           body within the territory of a Member (hereinafter referred to as
           "government"), i.e., where:

           (i)   Government practice involves a direct transfer of funds
                 (e.g., grants, loans, and equity infusion), potential
                 direct transfers of funds or liabilities (e.g., loan
                 guarantees);

           (ii)  government revenue that is otherwise due, is foregone or
                 not collected (e.g., fiscal incentives such as tax
                 credits)[1];

           (iii) a government provides goods or services other than general
                 infrastructure, or purchases goods;

           (iv)  a government makes payments to a funding mechanism, or
                 entrusts or directs a private body to carry out one or more
                 of the type of functions illustrated in (i) to (iii) above
                 which would normally be vested in the government and the
                 practice, in no real sense, differs from practices normally
                 followed by governments;

                                   or

      (a)(2)there is any form of income or price support in the sense of
           Article XVI of the GATT 1994;

                                   and

      (b)  a benefit is thereby conferred.

1.2   A subsidy as defined in paragraph 1 above shall be subject to the
provisions of Part II or shall be subject to the provisions of Part III or V
of this Agreement only if such a subsidy is specific in accordance with the
provisions of Article 2 below.








                                Article 2

                               Specificity


2.1   In order to determine whether a subsidy, as defined in paragraph 1 of
Article 1 above is specific to an enterprise or industry or group of
enterprises or industries (hereinafter referred to as "certain enterprises")
within the jurisdiction of the granting authority, the following principles
shall apply:

      (a)  Where the granting authority, or the legislation pursuant to
           which the granting authority operates, explicitly limits access
           to a subsidy to certain enterprises, such subsidy shall be
           specific.

      (b)  Where the granting authority, or the legislation pursuant to
           which the granting authority operates, establishes objective
           criteria or conditions[2] governing the eligibility for, and the
           amount of, a subsidy, specificity shall not exist, provided that
           the eligibility is automatic and that such criteria and
           conditions are strictly adhered to.  The criteria or conditions
           must be clearly spelled out in law, regulation, or other official
           document, so as to be capable of verification.

      (c)  If, notwithstanding any appearance of non-specificity resulting
           from the application of the principles laid down in subparagraphs
           (a) and (b) above, there are reasons to believe that the subsidy
           may in fact be specific, other factors may be considered.  Such
           factors are:  use of a subsidy programme by a limited number of
           certain enterprises, predominant use by certain enterprises, the
           granting of disproportionately large amounts of subsidy to
           certain enterprises, and the manner in which discretion has been
           exercised by the granting authority in the decision to grant a
           subsidy.[3]  In applying this subparagraph, account shall be
           taken of the extent of diversification of economic activities
           within the jurisdiction of the granting authority, as well as of
           the length of time during which the subsidy programme has been in
           operation.

2.2   A subsidy which is limited to certain enterprises located within a
designated geographical region within the jurisdiction of the granting
authority will be specific.  It is understood that the setting or change of
generally applicable tax rates by all levels of government entitled to do so
shall not be deemed to be a specific subsidy for the purposes of this
Agreement.

2.3   Any subsidy falling under the provisions of Article 3 shall be deemed
to be specific.

2.4   Any determination of specificity under the provisions of this Article
shall be clearly substantiated on the basis of positive evidence.


                     PART II:  PROHIBITED SUBSIDIES

                                Article 3

                               Prohibition


3.1   Except as provided in the Agreement on Agriculture, the following
subsidies, within the meaning of Article 1 above, shall be prohibited:

      (a)  subsidies contingent, in law or in fact[4], whether solely or as
           one of several other conditions, upon export performance,
           including those illustrated in Annex I;[5]

      (b)  subsidies contingent, whether solely or as one of several other
           conditions, upon the use of domestic over imported goods.

3.2   Members shall not grant nor maintain subsidies referred to in
paragraph 1.


                               Article 4

                                Remedies


4.1   Whenever a Member has reason to believe that a prohibited subsidy is
being granted or maintained by another Member, such Member may request
consultations with such other Member.

4.2   A request for consultations under paragraph 1 above shall include a
statement of available evidence with regard to the existence and nature of
the subsidy in question.

4.3   Upon request for consultations under paragraph 1 above, the Member
believed to be granting or maintaining the subsidy in question shall enter
into such consultations as quickly as possible.   The purpose of the
consultations shall be to clarify the facts of the situation and to arrive
at a mutually acceptable solution.

4.4   If no mutually acceptable solution has been reached within thirty
days[6] of the request for consultations, any Member party to such
consultations may refer the matter to the Dispute Settlement Body[7] (the
DSB) for the immediate establishment of a Panel, unless the DSB decides by
consensus not to establish a panel.

4.5   Upon its establishment, the Panel may request the assistance of the
Permanent Group of Experts (hereinafter referred to as "PGE") with regard to
whether the measure in question is a prohibited subsidy.  If so requested,
the PGE shall immediately review the evidence with regard to the existence
and nature of the measure in question and shall provide an opportunity for
the Member granting or maintaining the measure to demonstrate that the
measure in question is not a prohibited subsidy.   The PGE shall report its
conclusions to the Panel within a time limit determined by the Panel.  The
PGE's conclusions on the issue of whether or not the measure in question is
a prohibited subsidy shall be accepted by the Panel without modification.

4.6   The Panel, established pursuant to paragraph 4 above, shall submit its
final report to the Members party to the dispute.  The report shall be
circulated to all Members within ninety days of the date of the composition
and the establishment of the Panel's terms of reference.

4.7   If the measure in question is found to be a prohibited subsidy, the
Panel shall recommend that the subsidizing Member withdraw the subsidy
without delay.   In this regard, the Panel shall specify in its
recommendation the time period within which the measure must be withdrawn.

4.8   Within thirty days of the issuance of the Panel's report to all
Members, the report shall be adopted by the DSB unless one of the parties to
the dispute formally notifies the DSB of its decision to appeal or the DSB
decides by consensus not to adopt the report.

4.9   Where a panel report is appealed, the Appellate Body shall issue its
decision within thirty days from the date when the party to the dispute
formally notifies its intention to appeal.  When the Appellate Body
considers that it cannot provide its report within thirty days, it shall
inform the DSB in writing of the reasons for the delay together with an
estimate of the period within which it will submit its report.  In no case
shall the proceedings exceed sixty days.  The appellate report shall be
adopted by the DSB and unconditionally accepted by the parties to the
dispute unless the DSB decides by consensus not to adopt the appellate
report within twenty days following its issuance to the Members.[8]

4.10  In the event the recommendation of the DSB is not followed within the
time period specified by the Panel, which shall commence from the date of
adoption of the Panel's report or the Appellate Body's report, the DSB shall
grant authorization to the complaining Member to take appropriate[9]
countermeasures, unless the DSB decides by consensus to reject the request.

4.11  In the event a party to the dispute requests arbitration under
paragraph 22.6 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (the DSU), the arbitrator shall determine whether the
countermeasures are appropriate.[10]

4.12  For purposes of disputes conducted pursuant to this Article, except
for time periods specifically prescribed in this Article, time periods
applicable under the DSU for the conduct of such disputes shall be half the
time prescribed therein.


                     PART III:  ACTIONABLE SUBSIDIES


                               Article 5

                              Trade Effects


5.1   No Member should cause, through the use of any subsidy referred to in
paragraphs 1 and 2 of Article 1 above, adverse effects to the interests of
other Members, i.e,:

      (a)  injury to the domestic industry of another Member;[11]

      (b)  nullification or impairment of benefits accruing directly or
           indirectly to other Members under the GATT 1994 in particular the
           benefits of concessions bound under Article II of the GATT
           1994;[12]

      (c)  serious prejudice to the interests of another Member.[13]

This Article does not apply to subsidies maintained on agricultural products
as provided in Article 13 of the Agreement on Agriculture.


                                Article 6

                            Serious Prejudice


6.1   Serious prejudice in the sense of Article 5(c) shall be deemed to
exist in the case of:

      (a)  the total ad valorem subsidization[14] of a product exceeding 5
           per cent;[15]

      (b)  subsidies to cover operating losses sustained by an industry;

      (c)  subsidies to cover operating losses sustained by an enterprise,
           other than one-time measures which are non-recurrent and cannot
           be repeated for that enterprise and which are given merely to
           provide time for the development of long-term solutions and to
           avoid acute social problems;

      (d)  direct forgiveness of debt, i.e., forgiveness of government-held
           debt, and grants to cover debt repayment.[16]

6.2   Notwithstanding the provisions of paragraph 1 above, serious prejudice
shall not be found if the subsidizing Member demonstrates that the subsidy
in question has not resulted in any of the effects enumerated in paragraph 3
below.

6.3   Serious prejudice in the sense of Article 5(c) may arise in any case
where one or several of the following apply:

      (a)  the effect of the subsidy is to displace or impede the imports of
           like product into the market of the subsidizing Member;

      (b)  the effect of the subsidy is to displace or impede the exports of
           like product of another  Member from a third country market;

      (c)  the effect of the subsidy is a significant price undercutting by
           the subsidized products as compared with the price of a like
           product of another Member in the same market or significant price
           suppression, price depression or lost sales in the same market;

      (d)  the effect of the subsidy is an increase in the world market
           share of the subsidizing Member in a particular subsidized
           primary product or commodity[17] as compared to the average share
           it had during the previous period of 3 years and this increase
           must follow a consistent trend over a period when subsidies have
           been granted.

6.4   For the purpose of paragraph 3(b) above, displacing or impeding
exports shall include any case in which, subject to the provisions of
paragraph 7 below, it has been demonstrated to the Committee that there has
been a change in relative shares of the market to the disadvantage of the
non-subsidized like product (over an appropriately representative period of,
in normal circumstances, at least one year, sufficient to demonstrate clear
trends in the development of the market for the product concerned).  "Change
in relative shares of the market" shall include any of the following
situations:  (i) there is an increase in the market share of the subsidized
product;  (ii) the market share of the subsidized product remains constant
in circumstances in which, in the absence of the subsidy, it would have
declined;  (iii) the market share of the subsidized product declines, but at
a slower rate than would have been the case in the absence of the subsidy.

6.5   For the purpose of paragraph 3(c) above, price undercutting shall
include any case in which it has been demonstrated to the Committee through
comparing prices of the subsidized product with prices of non-subsidized
like products supplied to the same market.  The comparison shall be made at
the same level of trade and at comparable times, due account being taken of
any other factor affecting price comparability.  However, if such a direct
comparison is not possible, the existence of price undercutting may be
demonstrated on the basis of export unit values.

6.6   Each Member, in the market of which serious prejudice is alleged to
have arisen, shall, subject to the provisions of paragraph 3 of Annex V,
make available to the parties to a dispute and to the Committee all relevant
information that can be obtained as to the changes in market shares of the
disputing parties as well as concerning prices of the products involved.

6.7   Displacement or impedence resulting in serious prejudice shall not
arise under paragraph 3 above where any of the following circumstances
exist[18] during the relevant period:

      (a)  prohibition or restriction on exports of the like product from
           the complaining Member or on imports from the complaining Member
           into the third market concerned;

      (b)  decision by an importing government operating a monopoly of trade
           or state trading in the product concerned to shift, for
           non-commercial reasons, imports from the complaining Member to
           another country or countries;

      (c)  natural disasters, strikes, transport disruptions or other force
           majeure substantially affecting production, qualities, quantities
           or prices of the product available for exports from the
           complaining Member;

      (d)  existence of arrangements limiting exports from the complaining
           Member;

      (e)  voluntary decrease in the availability for export of the product
           concerned from the complaining Member (including, inter alia, a
           situation where firms in the complaining Member have been
           autonomously reallocating exports of this product to new
           markets);

      (f)  failure to conform to standards and other regulatory requirements
           in the importing country.

6.8   In the absence of circumstances referred to in paragraph 7 above, the
existence of serious prejudice should be determined on the basis of the
information submitted in accordance with the provisions of Annex V.

6.9   This Article does not apply to subsidies maintained on agricultural
products as provided in Article 13 of the Agreement on Agriculture.


                                Article 7

                                Remedies


7.1   Except as provided in Article 13 of the Agreement on Agriculture,
whenever a Member has reason to believe that any subsidy referred to in
Article 1, granted or maintained by another Member, results in injury to its
domestic industry, nullification or impairment or serious prejudice, such
Member may request consultations with such other Member.

7.2   A request for consultations under paragraph 1 above shall include a
statement of available evidence with regard to (a) the existence and nature
of the subsidy in question, and (b) the injury caused to the domestic
industry, or the nullification or impairment, or serious prejudice[19]
caused to the interests of the Member requesting consultations.

7.3   Upon request for consultations under paragraph 1 above, the Member
believed to be granting or maintaining the subsidy practice in question
shall enter into such consultations as quickly as possible.  The purpose of
the consultations shall be to clarify the facts of the situation and to
arrive at a mutually acceptable solution.

7.4   If consultations do not result in a mutually acceptable solution
within sixty days[20], any Member party to such consultations may refer the
matter to the Dispute Settlement Body for the establishment of a Panel,
unless the DSB decides by consensus not to establish a panel.  The
composition of the Panel and its terms of reference shall be established
within fifteen days from the date when it is established.

7.5   The Panel, established pursuant to paragraph 4 above, shall review the
matter and shall submit its final report to the Members party to the
dispute.  The report shall be circulated to all Members within 120 days of
the date of the composition and establishment of the Panel's terms of
reference.

7.6   Within thirty days of the issuance of the Panel's report to all
Members, the report shall be adopted by the DSB[21] unless one of the
parties to the dispute formally notifies the DSB of its decision to appeal
or the DSB decides by consensus not to adopt the report.

7.7   Where a panel report is appealed, the Appellate Body shall issue its
decision within sixty days from the date when the party to the dispute
formally notifies its intention to appeal.  When the Appellate Body
considers that it cannot provide its report within sixty days, it shall
inform the DSB in writing of the reasons for the delay together with an
estimate of the period within which it will submit its report.  In no case
shall the proceedings exceed ninety days.  The appellate report shall be
adopted by the DSB and unconditionally accepted by the parties to the
dispute unless the DSB decides by consensus not to adopt the appellate
report within twenty days following its issuance to the Members.[22]

7.8   Where a panel report or an Appellate Body report is adopted, in which
it is determined that any subsidy has resulted in adverse effects to the
interests of another Member within the meaning of Article 5 of this
Agreement, the Member granting or maintaining such subsidy shall take
appropriate steps to remove the adverse effects or shall withdraw the
subsidy.

7.9   In the event the Member has not taken appropriate steps to remove the
adverse effects of the subsidy or withdraw the subsidy within six months
from the date when the DSB adopts the panel report or the Appellate Body
report, and in the absence of agreement on compensation, the DSB shall grant
authorization to the complaining Member to take countermeasures,
commensurate with the degree and nature of the adverse effects determined to
exist, unless the DSB decides by consensus to reject the request.

7.10  In the event that a party to the dispute requests arbitration under
paragraph 22.6 of the DSU, the arbitrator shall determine whether the
countermeasures are commensurate with the degree and nature of the adverse
effects determined to exist.




                    PART IV:  NON-ACTIONABLE SUBSIDIES


                                Article 8

               Identification of Non-Actionable Subsidies


8.1   The following subsidies shall be considered as non-actionable:

      (a)  subsidies which are not specific, within the meaning of paragraph
           1 of Article 2 above;

      (b)  subsidies which are specific within the meaning of Article 2
           above but which meet all of the conditions provided for in
           paragraphs 2(a) or 2(b) below.

8.2   Notwithstanding the provisions of Parts III and V of this Agreement,
the following subsidies shall be non-actionable[23]:

      (a)  assistance for research activities conducted by firms or by
           higher education or research establishments on a contract basis
           with firms if:[24], [25], [26]

           the assistance covers not more than 75 per cent of the costs of
           industrial research[27] or 50 per cent of the costs of
           pre-competitive development activity;[28]

           and provided that such assistance is limited exclusively to:

           (i)   personnel costs (researchers, technicians and other
                 supporting staff employed exclusively in the research
                 activity);

           (ii)  costs of instruments, equipment, land and buildings used
                 exclusively and permanently (except when disposed of on a
                 commercial basis) for the research activity;

           (iii) costs of consultancy and equivalent services used
                 exclusively for the research activity, including bought-in
                 research, technical knowledge, patents, etc.;

           (iv)  additional overhead costs incurred directly as a result of
                 the research activity;

           (v)   other running costs (such as those of materials, supplies
                 and the like), incurred directly as a result of the
                 research activity.

      (b)  assistance to disadvantaged regions within the territory of a
           Member given pursuant to a general framework of regional
           development[29] and non-specific (within the meaning of paragraph
           1 of Article 2 above) within eligible regions provided that:

           (i)   each disadvantaged region must be a clearly designated
                 contiguous geographical area with a definable economic and
                 administrative identity;

           (ii)  the region is considered as disadvantaged on the basis of
                 neutral and objective criteria[30], indicating that the
                 region's difficulties arise out of more than temporary
                 circumstances;  such criteria must be clearly spelled out
                 in law, regulation, or other official document, so as to be
                 capable of verification;

           (iii) the criteria shall include a measurement of economic
                 development which shall be based on at least one of the
                 following factors:

                 -    one of either income per capita or household income
                      per capita, or GDP per capita, which must not be above
                      85 per cent of the average for the territory
                      concerned;

                 -    unemployment rate, which must be at least 110 per cent
                      of the average for the territory concerned;

                 as measured over a three-year period:  such measurement,
                 however, may be a composite one and may include other
                 factors.

      (c)  assistance to promote adaptation of existing facilities[31] to
           new environmental requirements imposed by law and/or regulations
           which result in greater constraints and financial burden on
           firms, provided that the assistance:

           (i)   is a one-time non-recurring measure;  and

           (ii)  is limited to 20 per cent of the cost of adaptation;  and

           (iii) does not cover the cost of replacing and operating the
                 assisted investment, which must be fully borne by firms;
                 and

           (iv)  is directly linked to and proportionate to a firm's planned
                 reduction of nuisances and pollution, and does not cover
                 any manufacturing cost savings which may be achieved;  and

           (v)   is available to all firms which can adopt the new equipment
                 and/or production processes.

8.3   A subsidy programme for which the provisions of paragraph 2 above are
invoked shall be notified in advance of its implementation to the Committee
in accordance with the provisions of Part VII of this Agreement.  Any such
notification shall be sufficiently precise to enable other Members to
evaluate the consistency of the programme with the conditions and criteria
provided for in the relevant provisions of paragraph 2 above.  Members shall
also provide the Committee with yearly updating of such notifications, in
particular by supplying information on global expenditure for each
programme, and about any modification of the programme since the previous
update.  Other Members shall have the right to request information about
individual cases of subsidization under a notified programme.[32]

8.4   Upon request of a Member, the MTO Secretariat shall review a
notification made pursuant to paragraph 3 above and, where necessary, may
require additional information from the subsidizing Member concerning the
notified programme under review.  The Secretariat shall report its finding
to the Committee.  The Committee shall then, upon request, promptly review
the findings of the Secretariat (or, if a review by the Secretariat has not
been requested, the notification itself), with a view to determining whether
the conditions and criteria laid down in paragraph 2 above have not been
met.  The procedure provided for in this paragraph shall be completed at the
latest at the first regular meeting of the Committee following the
notification of a subsidy programme, provided that at least two months have
elapsed between such notification and the regular meeting of the Committee.
The review procedure described in this paragraph shall also apply, upon
request, to substantial modifications of a programme notified in the yearly
updates referred to in paragraph 3 above.

8.5   Upon the request of a Member, the determination by the Committee
referred to in paragraph 4 above, or a failure by the Committee to make such
a determination, as well as the violation, in individual cases, of the
conditions set out in a notified programme, shall be submitted to binding
arbitration.  The arbitration body shall present its conclusions to the
Members within 120 days from the date when the matter was referred to the
arbitration body.  Except as otherwise provided in this paragraph, the DSU
shall apply to arbitrations conducted under this paragraph.


                                Article 9

                  Consultations and Authorized Remedies


9.1   If, in the course of implementation of a programme referred to in
paragraph 2 of Article 8 above, notwithstanding the fact that the programme
is consistent with the criteria laid down in paragraph 2 of Article 8, a
Member has reasons to believe that this programme has resulted in serious
adverse effects to the domestic industry of that Member, such as to cause
damage which would be difficult to repair, such Member may request
consultations with the Member granting the subsidy.

9.2   Upon request for consultations under paragraph 1 above, the Member
maintaining the subsidy programme in question shall enter into such
consultations as quickly as possible.  The purpose of the consultations
shall be to clarify the facts of the situation and to arrive at a mutually
acceptable solution.

9.3   If no mutually acceptable solution has been reached in consultations
under paragraph 2 within 60 days of the request for such consultations, the
requesting Member may refer the matter to the Committee.

9.4   Where a matter is referred to the Committee, the Committee shall
immediately review the facts involved and the evidence of the effects
referred to in paragraph 1 above.  If the Committee determines that such
effects exist, it may recommend to the subsidizing Member to modify this
programme in such a way as to remove these effects.  The Committee shall
present its conclusions within 120 days from the date when the matter is
referred to it under this provision.  In the event the recommendation is not
followed within 6 months, the Committee shall authorize the requesting
Member to take appropriate countermeasures commensurate with the nature and
degree of the effects determined to exist.


                    PART V:  COUNTERVAILING MEASURES


                               Article 10

             Application of Article VI of the GATT 1994[33]


      Members shall take all necessary steps to ensure that the imposition
of a countervailing duty[34] on any product of the territory of any Member
imported into the territory of another Member is in accordance with the
provisions of Article VI of the GATT 1994 and the terms of this Agreement.
Countervailing duties may only be imposed pursuant to investigations
initiated[35] and conducted in accordance with the provisions of this
Agreement and the Agreement on Agriculture.


                               Article 11

                 Initiation and Subsequent Investigation


11.1  Except as provided in paragraph 6 of Article 11, an investigation to
determine the existence, degree and effect of any alleged subsidy shall  be
initiated upon a written application by or on behalf of the domestic
industry.

11.2  An application under paragraph 1 shall include sufficient evidence of
the existence of (a) a subsidy and, if possible, its amount, (b) injury
within the meaning of Article VI of the GATT 1994 as interpreted by this
Agreement, and (c) a causal link between the subsidized imports and the
alleged injury.  Simple assertion, unsubstantiated by relevant evidence,
cannot be considered sufficient to meet the requirements of this paragraph.
The application shall contain such information as is reasonably available to
the applicant on the following:

      (i)  identity of the applicant and a description of the volume and
           value of the domestic production of the like product by the
           applicant.  Where a written application is made on behalf of the
           domestic industry, the application shall identify the industry on
           behalf of which the application is made by a list of all known
           domestic producers of the like product (or associations of
           domestic producers of the like product) and, to the extent
           possible, a description of the volume and value of domestic
           production of the like product accounted for by such producers;

      (ii) a complete description of the allegedly subsidized product, the
           names of the country or countries of origin or export in
           question, the identity of each known exporter or foreign producer
           and a list of known persons importing the product in question;

      (iii)evidence with regard to the existence, amount and nature of the
           subsidy in question;

      (iv) evidence that alleged material injury to a domestic industry is
           caused by subsidized imports through the effects of the
           subsidies;  this evidence includes information on the evolution
           of the volume of the allegedly subsidized imports, the effect of
           these imports on prices of the like product in the domestic
           market and the consequent impact of the imports on the domestic
           industry, as demonstrated by relevant factors and indices having
           a bearing on the state of the domestic industry, such as those
           listed in paragraphs 2 and 4 of Article 15.

11.3  The authorities shall review the accuracy and adequacy of the evidence
provided in the  application to determine whether the evidence is sufficient
to justify the opening of an investigation.

11.4  An investigation shall not be initiated pursuant to paragraph 1 unless
the authorities have determined, on the basis of an examination of the
degree of support for, or opposition to, the application expressed[36] by
domestic producers of the like product, that the application has been made
by or on behalf of the domestic industry.[37]  The application shall be
considered to have been made "by or on behalf of the domestic industry" if
it is supported by those domestic producers whose collective output
constitutes more than 50 per cent of the total production of the like
product produced by that portion of the domestic industry expressing either
support for or opposition to the application.  However, no investigation
shall be initiated when domestic producers expressly supporting the
application account for less than 25 per cent of total production of the
like product produced by the domestic industry.

11.5  The authorities shall avoid, unless a decision has been made to
initiate an investigation,  any publicizing of the application for the
initiation of  an investigation.

11.6  If in special circumstances, the authorities concerned decide to
initiate an investigation without having received a written application by
or on behalf of a domestic industry for the initiation of such
investigation, they shall proceed only if they have sufficient evidence of
the existence of a subsidy, injury and causal link, as described in
paragraph 2, to justify the initiation of an investigation.

11.7  The evidence of both subsidy and injury shall be considered
simultaneously (a) in the decision whether or not to initiate an
investigation and (b) thereafter during the course of the investigation,
starting on a date not later than the earliest date on which in accordance
with the provisions of this Agreement provisional measures may be applied.

11.8  In cases where products are not imported directly from the country of
origin but are exported to the country of importation from an intermediate
country, the provisions of this Agreement shall be fully applicable and the
transaction or transactions shall, for the purposes of this Agreement, be
regarded as having taken place between the country of origin and the country
of importation.

11.9  An application under paragraph 1 shall be rejected and an
investigation shall be terminated promptly as soon as the authorities
concerned are satisfied that there is not sufficient evidence of either
subsidization or of injury to justify proceeding with the case.  There shall
be immediate termination in cases where the amount of a subsidy is de
minimis, or where the volume of subsidized imports, actual or potential, or
the injury, is negligible.  For the purpose of this paragraph, the amount of
the subsidy shall be considered to be de minimis if the subsidy is less than
1 per cent ad valorem.

11.10 An investigation shall not hinder the procedures of customs clearance.

11.11 Investigations shall, except in special circumstances, be concluded
within one year after their initiation, and in no case more than 18 months.



                               Article 12

                                Evidence


12.1  Interested Members and all interested parties in a countervailing duty
investigation shall be given notice of the information which the authorities
require and ample opportunity to present in writing all evidence which they
consider relevant in respect of the investigation in question.

      12.1.1   Exporters, foreign producers or interested Members receiving
      questionnaires used in a countervailing duty investigation shall be
      given at least thirty days for reply.[38]  Due consideration should be
      given to any request for an extension of the thirty day period and,
      upon cause shown, such an extension should be granted whenever
      practicable.

      12.1.2  Subject to the requirement to protect confidential
      information, evidence presented in writing by one interested Member or
      interested party shall be made available promptly to other interested
      Members or interested parties participating in the investigation.

      12.1.3  As soon as an investigation has been initiated, the
      authorities shall provide the full text  of the written application
      received under paragraph 1 of Article 11 to the known exporters[39]
      and to the authorities of the exporting country and make it available,
      upon request, to other  interested parties involved.  Due regard shall
      be paid to the protection of confidential information  as provided for
      in paragraph 4 below.

12.2  Interested Members and interested parties also shall have the right,
upon justification, to present information orally.  Where such information
is provided orally, the interested parties subsequently shall be required to
reduce such submissions to writing.  Any decision of the investigating
authorities can only be based on such information and arguments as were on
the written record of this authority and which were available to interested
Members and interested parties participating in the investigation, due
account having been given to the need to protect confidential information.

12.3  The authorities shall whenever practicable provide timely
opportunities for all interested Members and interested parties to see all
information that is relevant to the presentation of their cases, that is not
confidential as defined in paragraph 4 and that is used by the authorities
in a countervailing duty investigation, and to prepare presentations on the
basis of this information.

12.4  Any information which is by nature confidential, (for example, because
its disclosure would be of significant competitive advantage to a competitor
or because its disclosure would have a significantly adverse effect upon a
person supplying the information or upon a person from whom the supplier
acquired the information) or which is provided on a confidential basis by
parties to an investigation shall, upon good cause shown, be treated as such
by the authorities.   Such information shall not be disclosed without
specific permission of the party submitting it.[40]

      12.4.1  The authorities shall require interested Members or interested
      parties providing confidential information to furnish non-confidential
      summaries thereof.  These summaries shall be in sufficient detail to
      permit a reasonable understanding of the substance of the information
      submitted in confidence.  In exceptional circumstances, such Members
      or parties may indicate that such information is not susceptible of
      summary.  In such exceptional circumstances, a statement of the
      reasons why summarization is not possible must be provided.

      12.4.2  If the authorities find that a request for confidentiality is
      not warranted and if the supplier of the information is either
      unwilling to make the information public or to authorize its
      disclosure in generalized or summary form, the authorities may
      disregard such information unless it can be demonstrated to their
      satisfaction from appropriate sources that the information is
      correct.[41]

12.5  Except in circumstances provided for in paragraph 7, the authorities
shall during the course of an investigation satisfy themselves as to the
accuracy of the information supplied by interested parties or interested
Members upon which their findings are based.

12.6  The investigating authorities may carry out investigations in the
territory of other Members as required, provided that they have notified in
good time the Member in question and unless the latter objects to the
investigation.   Further, the investigating authorities may carry out
investigations on the premises of a firm and may examine the records of a
firm if (a) the firm so agrees and (b) the Member in question is notified
and does not object.   The procedures set forth in Annex VI to this
Agreement shall apply to investigations on the premises of a firm.  The
authorities shall, subject to the requirement to protect confidential
information, make the results of any verifications available or provide
disclosure thereof pursuant to paragraph 8, to the firms to which they
pertain and may make such results available to the applicants.

12.7  In cases in which any interested party or Member refuses access to, or
otherwise does not provide, necessary information within a reasonable period
or significantly impedes the investigation, preliminary and final
determinations, affirmative or negative, may be made on the basis of the
facts available.

12.8  The authorities shall, before a final determination is made, inform
all interested Members or interested parties of the essential facts under
consideration which form the basis for the decision whether to apply
definitive measures.   Such disclosure should take place in sufficient time
for the parties to defend their interests.

12.9  For the purposes of this Agreement, "interested parties" shall
include:

      (i)  an exporter or foreign producer or the importer of a product
           subject to investigation, or a trade or business association a
           majority of the members of which are producers, exporters or
           importers of such product;  and

      (ii) a producer of the like product in the importing country or a
           trade and business association a majority of the members of which
           produce the like product in the importing country.

This list shall not preclude Members from allowing domestic or foreign
parties other than those mentioned above to be included as interested
parties.

12.10 The authorities shall provide opportunities for industrial users of
the product under investigation, and for representative consumer
organizations in cases where the product is commonly sold at the retail
level, to provide information which is relevant to the investigation
regarding subsidization, injury and causality.

12.11 The authorities shall take due account of any difficulties experienced
by interested parties, in particular small companies, in supplying
information requested and provide any assistance practicable.

12.12 The procedures set out above are not intended to prevent the
authorities of a Member from proceeding expeditiously with regard to
initiating an investigation, reaching preliminary or final determinations,
whether affirmative or negative, or from applying provisional or final
measures, in accordance with relevant provisions of this Agreement.


                               Article 13

                              Consultations


13.1  As soon as possible after an application under Article 11 is accepted,
and in any event before the initiation of any investigation, Members the
products of which may be subject to such investigation shall be invited for
consultations with the aim of clarifying the situation as to the matters
referred to in Article 11:1 above and arriving at a mutually agreed
solution.

13.2  Furthermore, throughout the period of investigation, Members the
products of which are the subject of the investigation shall be afforded a
reasonable opportunity to continue consultations, with a view to clarifying
the factual situation and to arriving at a mutually agreed solution.[42]

13.3  Without prejudice to the obligation to afford reasonable opportunity
for consultation, these provisions regarding consultations are not intended
to prevent the authorities of a Member from proceeding expeditiously with
regard to initiating the investigation, reaching preliminary or final
determinations, whether affirmative or negative, or from applying
provisional or final measures, in accordance with the provisions of this
Agreement.

13.4  The Member which intends to initiate any investigation or is
conducting such an investigation shall permit, upon request, the Member or
Members the products of which are subject to such investigation access to
non-confidential evidence including the non-confidential summary of
confidential data being used for initiating or conducting the investigation.


                               Article 14

             Calculation of the Amount of a Subsidy in Terms
                     of the Benefit to the Recipient


      For the purpose of Part V of this Agreement, any method used by the
investigating authority to calculate the benefit to the recipient conferred
pursuant to paragraph 1 of Article 1 above shall be provided for in the
national legislation or implementing regulations of the Member concerned and
its application to each particular case shall be transparent and adequately
explained.   Furthermore any such method shall be consistent with the
following guidelines:

      (a)  Government provision of equity capital shall not be considered as
           conferring a benefit, unless the investment decision can be
           regarded as inconsistent with the usual investment practice
           (including for the provision of risk capital) of private
           investors in the territory of that Member;

      (b)  A loan by a government shall not be considered as conferring a
           benefit, unless there is a difference between the amount that the
           firm receiving the loan pays on the government loan and a
           comparable commercial loan which the firm could actually obtain
           on the market.  In this case the benefit shall be the difference
           between these two amounts;

      (c)  A loan guarantee by a government shall not be considered as
           conferring a benefit, unless there is a difference between the
           amount that the firm receiving the guarantee pays on a loan
           guaranteed by the government and the amount that the firm would
           pay for a comparable commercial loan absent the government
           guarantee.   In this case the benefit shall be the difference
           between these two amounts adjusted for any differences in fees;

      (d)  The provision of goods or services or purchase of goods by a
           government shall not be considered as conferring a benefit unless
           the provision is made for less than adequate remuneration, or the
           purchase is made for more than adequate remuneration.   The
           adequacy of remuneration shall be determined in relation to
           prevailing market conditions for the good or service in question
           in the country of provision or purchase (including price,
           quality, availability, marketability, transportation and other
           conditions of purchase or sale).


                               Article 15

                       Determination of Injury[43]


15.1  A determination of injury for purposes of Article VI of the GATT 1994
shall be based on positive evidence and involve an objective examination of
both (a) the volume of the subsidized imports and the effect of the
subsidized imports on prices in the domestic market for like products[44]
and (b) the consequent impact of these imports on the domestic producers of
such products.

15.2  With regard to the volume of the subsidized imports, the investigating
authorities shall consider whether there has been a significant increase in
subsidized imports, either in absolute terms or relative to production or
consumption in the importing Member.   With regard to the effect of the
subsidized imports on prices, the investigating authorities shall consider
whether there has been a significant price undercutting by the subsidized
imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices
to a significant degree or to prevent price increases, which otherwise would
have occurred, to a significant degree.   No one or several of these factors
can necessarily give decisive guidance.

15.3  Where imports of a product from more than one country are
simultaneously subject to countervailing duty investigations, the
investigating authorities may cumulatively assess effects of such imports
only if they determine that (1) the amount of subsidization established in
relation to the imports from each country is more than de minimis as defined
in paragraph 9 of Article 11 and that the volume of imports from each
country is not negligible and (2) a cumulative assessment of the effects of
the imports is appropriate in light of the conditions of competition between
imported products and the conditions of competition between the imported
products and the like domestic product.

15.4  The examination of the impact of the subsidized imports on the
domestic industry shall include an evaluation of all relevant economic
factors and indices having a bearing on the state of the industry, including
actual and potential decline in output, sales, market share, profits,
productivity, return on investments, or utilization of capacity;  factors
affecting domestic prices;  actual and potential negative effects on cash
flow, inventories, employment, wages, growth, ability to raise capital or
investments and, in the case of agriculture, whether there has been an
increased burden on Government support programmes.  This list is not
exhaustive, nor can one or several of these factors necessarily give
decisive guidance.

15.5  It must be demonstrated that the subsidized imports are, through the
effects[45] of subsidies,  causing injury within the meaning of this
Agreement.  The demonstration of a causal relationship between the
subsidized imports and the injury to the domestic industry shall be based on
an examination of all relevant evidence before the authorities.  The
authorities shall also examine any known factors other than the subsidized
imports which at the same time are injuring the domestic industry, and the
injuries caused by these other factors must not be attributed to the
subsidized imports.  Factors which may be relevant in this respect include,
inter alia, the volumes and prices of non-subsidized imports of the product
in question, contraction in demand or changes in the patterns of
consumption, trade restrictive practices of and competition between the
foreign and domestic producers, developments in technology and the export
performance and productivity of the domestic industry.

15.6  The effect of the subsidized imports shall be assessed in relation to
the domestic production of the like product when available data permit the
separate identification of that production on the basis of such criteria as
the production process, producers' sales and profits.  If such separate
identification of that production is not possible, the effects of the
subsidized imports shall be assessed by the examination of the production of
the narrowest group or range of products, which includes the like product,
for which the necessary information can be provided.

15.7  A determination of a threat of material injury shall be based on facts
and not merely on allegation, conjecture or remote possibility.   The change
in circumstances which would create a situation in which the subsidy would
cause injury must be clearly foreseen and imminent.   In making a
determination regarding the existence of a threat of material injury, the
investigating authorities should consider, inter alia, such factors as:

      (i)  nature of the subsidy or subsidies in question and the trade
           effects likely to arise therefrom;

      (ii) a significant rate of increase of subsidized imports into the
           domestic market indicating the likelihood of substantially
           increased importations;

      (iii)sufficient freely disposable or an imminent, substantial increase
           in capacity of the exporter indicating the likelihood of
           substantially increased subsidized exports to the importing
           country's market, taking into account the availability of other
           export markets to absorb any additional exports;

      (iv) whether imports are entering at prices that will have a
           significant depressing or suppressing effect on domestic prices,
           and would likely increase demand for further imports;

      (v)  inventories of the product being investigated.

No one of these factors by itself can necessarily give decisive guidance but
the totality of the factors considered must lead to the conclusion that
further subsidized exports are imminent and that, unless protective action
is taken, material injury would occur.

15.8  With respect to cases where injury is threatened by subsidized
imports, the application of countervailing measures shall be considered and
decided with special care.



                               Article 16

                     Definition of Domestic Industry


16.1  For the purposes of this Agreement, the term "domestic industry"
shall, except as provided in paragraph 2 below, be interpreted as referring
to the domestic producers as a whole of the like products or to those of
them whose collective output of the products constitutes a major proportion
of the total domestic production of those products, except that when
producers are related[46] to the exporters or importers or are themselves
importers of the allegedly subsidized product or a like product from other
countries, the term "domestic industry" may be interpreted as referring to
the rest of the producers.

16.2  In exceptional circumstances, the territory of a Member may, for the
production in question, be divided into two or more competitive markets and
the producers within each market may be regarded as a separate industry if
(a) the producers within such market sell all or almost all of their
production of the product in question in that market, and (b) the demand in
that market is not to any substantial degree supplied by producers of the
product in question located elsewhere in the territory.   In such
circumstances, injury may be found to exist even where a major portion of
the total domestic industry is not injured, provided there is a
concentration of subsidized imports into such an isolated market and
provided further that the subsidized imports are causing injury to the
producers of all or almost all of the production within such market.

16.3  When the domestic industry has been interpreted as referring to the
producers in a certain area,  i.e. a market as defined in paragraph 2 above,
countervailing duties shall be levied only on the products in question
consigned for final consumption to that area.   When the constitutional law
of the importing Member does not permit the levying of countervailing duties
on such a basis, the importing Member may levy the countervailing duties
without limitation only if (a) the exporters shall have been given an
opportunity to cease exporting at subsidized prices to the area concerned or
otherwise give assurances pursuant to Article 18 of this Agreement, and
adequate assurances in this regard have not been promptly given, and (b)
such duties cannot be levied only on products of specific producers which
supply the area in question.

16.4  Where two or more countries have reached under the provisions of
paragraph 8(a) of Article XXIV of the GATT 1994 such a level of integration
that they have the characteristics of a single, unified market, the industry
in the entire area of integration shall be taken to be the domestic industry
referred to in paragraphs 1 and 2 above.

16.5  The provisions of paragraph 6 of Article 15 shall be applicable to
this Article.


                               Article 17

                          Provisional Measures


17.1  Provisional measures may be applied only if:

      (a)  an investigation has been initiated in accordance with the
           provisions of Article 11,  a public notice has been given to that
           effect and interested Members and interested parties have been
           given adequate opportunities to submit information and make
           comments;

      (b)  a preliminary affirmative determination has been made that a
           subsidy exists and that there is material injury or threat
           thereof to a domestic industry caused by subsidized imports;  and

      (c)  the authorities concerned judge such measures necessary to
           prevent injury being caused during the investigation.

17.2  Provisional measures may take the form of provisional countervailing
duties guaranteed by cash deposits or bonds equal to the amount of the
provisionally calculated amount of subsidization.

17.3  Provisional measures shall not be applied sooner than 60 days from the
date of initiation of the investigation.

17.4  The application of provisional measures shall be limited to as short a
period as possible, not exceeding four months.

17.5  The relevant provisions of Article 19 shall be followed in the
application of provisional measures.


                               Article 18

                              Undertakings


18.1  Proceedings may[47] be suspended or terminated without the imposition
of provisional measures or countervailing duties upon receipt of
satisfactory voluntary undertakings under which:

           (i)   the government of the exporting country agrees to eliminate
                 or limit the subsidy or take other measures concerning its
                 effects;  or

           (ii)  the exporter agrees to revise its prices so that the
                 investigating authorities are satisfied that the injurious
                 effect of the subsidy is eliminated.   Price increases
                 under such undertakings shall not be higher than necessary
                 to eliminate the amount of the subsidy.     It is desirable
                 that the price increases be less than the amount of the
                 subsidy if such increases would be adequate to remove the
                 injury to the domestic industry.

18.2  Undertakings shall not be sought or accepted unless the authorities of
the importing country  have made a preliminary affirmative determination of
subsidization and  injury caused by such subsidization and, in case of
undertakings from exporters, have obtained the consent of the exporting
Member.

18.3  Undertakings offered need not be accepted if the authorities of the
importing Member consider their acceptance impractical, for example if the
number of actual or potential exporters is too great, or for other reasons,
including reasons of general policy.  Should the case arise and where
practicable, the authorities shall provide to the exporter the reasons which
have led them to consider acceptance of an undertaking as inappropriate, and
shall, to the extent possible, give the exporter an opportunity to make
comments thereon.

18.4  If the undertakings are accepted, the investigation of subsidization
and injury shall nevertheless be completed if the exporting Member so
desires or the importing Member so decides.   In such a case, if a negative
determination of subsidization or injury or threat thereof is made, the
undertaking shall automatically lapse, except in cases where such a
determination is due in large part to the existence of an undertaking.  In
such cases the authorities concerned may require that an undertaking be
maintained for a reasonable period consistent with the provisions of this
Agreement.  In the event that an affirmative determination of subsidization
and injury is made, the undertaking shall continue consistent with its terms
and the provisions of this Agreement.

18.5  Price undertakings may be suggested by the authorities of the
importing Member, but no exporter shall be forced to enter into such an
undertaking.   The fact that governments or exporters do not offer such
undertakings, or do not accept an invitation to do so, shall in no way
prejudice the consideration of the case.  However, the authorities are free
to determine that a threat of injury is more likely to be realized if the
subsidized imports continue.

18.6  Authorities of an importing Member may require any government or
exporter from whom undertakings have been accepted to provide periodically
information relevant to the fulfilment of such undertakings, and to permit
verification of pertinent data.   In case of violation of undertakings, the
authorities of the importing Member may take, under this Agreement in
conformity with its provisions, expeditious actions which may constitute
immediate application of provisional measures using the best information
available.   In such cases definitive duties may be levied in accordance
with this Agreement on goods entered for consumption not more than ninety
days before the application of such provisional measures, except that any
such retroactive assessment shall not apply to imports entered before the
violation of the undertaking.


                               Article 19

           Imposition and Collection of Countervailing Duties


19.1  If, after reasonable efforts have been made to complete consultations,
a Member makes a final determination of the existence and amount of the
subsidy and that, through the effects of the subsidy, the subsidized imports
are causing injury, it may impose a countervailing duty in accordance with
the provisions of this section unless the subsidy or subsidies are
withdrawn.

19.2  The decision whether or not to impose a countervailing duty in cases
where all requirements for the imposition have been fulfilled and the
decision whether the amount of the countervailing duty to be imposed shall
be the full amount of the subsidy or less, are decisions to be made by the
authorities of the importing Member.   It is desirable that the imposition
should be permissive in the territory of all Members, that the duty should
be less than the total amount of the subsidy if such lesser duty would be
adequate to remove the injury to the domestic industry, and that procedures
should be established which would allow the authorities concerned to take
due account of representations made by domestic interested parties[48] whose
interests might be adversely affected by the imposition of a countervailing
duty.

19.3  When a countervailing duty is imposed in respect of any product, such
countervailing duty shall be levied, in the appropriate amounts in each
case, on a non-discriminatory basis on imports of such product from all
sources found to be subsidized and causing injury, except as to imports from
those sources which have renounced any subsidies in question or from which
undertakings under the terms of this Agreement have been accepted.   Any
exporter whose exports are subject to a definitive countervailing duty but
who was not actually investigated for reasons other than a refusal to
co-operate, shall be entitled to an expedited review in order that the
investigating authorities promptly establish an individual countervailing
duty rate for that exporter.

19.4  No countervailing duty shall be levied[49] on any imported product in
excess of the amount of the subsidy found to exist, calculated in terms of
subsidization per unit of the subsidized and exported product.


                               Article 20

                              Retroactivity


20.1  Provisional measures and countervailing duties shall only be applied
to products which enter for consumption after the time when the decision
under paragraph 1 of Article 17 and paragraph 1 of Article 19, respectively,
enters into force, subject to the exceptions set out below.

20.2  Where a final determination of injury (but not of a threat thereof or
of a material retardation of the establishment of an industry) is made or,
in the case of a final determination of a threat of injury, where the effect
of the subsidized imports would, in the absence of the provisional measures,
have led to a determination of injury, countervailing duties may be levied
retroactively for the period for which provisional measures, if any, have
been applied.

20.3  If the definitive countervailing duty is higher than the amount
guaranteed by the cash deposit or bond, the difference shall not be
collected.   If the definitive duty is less than the amount guaranteed by
the cash deposit or bond, the excess amount shall be reimbursed or the bond
released in an expeditious manner.

20.4  Except as provided in paragraph 2 above, where a determination of
threat of injury or material retardation is made (but no injury has yet
occurred) a definitive countervailing duty may be imposed only from the date
of the determination of threat of injury or material retardation and any
cash deposit made during the period of the application of provisional
measures shall be refunded and any bonds released in an expeditious manner.

20.5 Where a final determination is negative, any cash deposit made during
the period of the application of provisional measures shall be refunded and
any bonds released in an expeditious manner.

20.6 In critical circumstances where for the subsidized product in question
the authorities find that injury which is difficult to repair is caused by
massive imports in a relatively short period of a product benefiting from
subsidies paid or bestowed inconsistently with the provisions of the GATT
1994 and of this Agreement and where it is deemed necessary, in order to
preclude the recurrence of such injury, to assess countervailing duties
retroactively on those imports, the definitive countervailing duties may be
assessed on imports which were entered for consumption not more than ninety
days prior to the date of application of provisional measures.


                               Article 21

     Duration  and Review of Countervailing Duties and Undertakings


21.1  A countervailing duty shall remain in force only as long as and to the
extent necessary to counteract subsidization which is causing injury.

21.2  The authorities shall review the need for the continued imposition of
the duty, where warranted, on their own initiative or, provided that a
reasonable period of time has elapsed since the imposition of the definitive
countervailing duty, upon request by any interested party which submits
positive information substantiating the need for a review.  Interested
parties shall have the right to request the authorities to examine whether
the continued imposition of the duty is necessary to offset subsidization,
whether the injury would be likely to continue or recur if the duty were
removed or varied, or both.  If, as a result of the review under this
paragraph, the authorities determine that the countervailing duty is no
longer warranted, it shall be terminated immediately.

21.3  Notwithstanding the provisions of paragraphs 1 and 2, any definitive
countervailing duty shall be terminated on a date not later than five years
from its imposition (or from the date of the most recent review under
paragraph 2 if that review has covered both subsidization and injury, or
under this paragraph), unless the authorities determine, in a review
initiated before that date on their own initiative or upon a duly
substantiated request made by or on behalf of the domestic industry within a
reasonable period of time prior to that date, that the expiry of the duty
would be likely to lead to continuation or recurrence of subsidization and
injury.[50]  The duty may remain in force pending the outcome of such a
review.

21.4  The provisions of Article 12 regarding evidence and procedure shall
apply to any review carried out under this Article.  Any such review shall
be carried out expeditiously and shall normally be concluded within twelve
months of the date of initiation of the review.

21.5  The provisions of this Article shall mutatis mutandis apply to
undertakings accepted under Article 18.

                               Article 22

                    Public Notice  and Explanation of
                             Determinations


22.1  When the authorities are satisfied that there is sufficient evidence
to justify the initiation  of an investigation pursuant to Article 11, the
Member or Members, the products of which are subject to such investigation
and other interested parties known to the investigating authorities to have
an interest therein shall be notified and a public notice shall be given.

22.2  A public notice of the initiation of an investigation shall contain or
otherwise make available through a separate report[51] adequate information
on the following:  (i) the name of the exporting country or countries and
the product involved;  (ii) the date of initiation of the investigation;
(iii) a description of the subsidy practice or practices to be investigated;
(iv) a summary of the factors on which the allegation of injury is based;
(v) the address to which representations by interested parties should be
directed;  and (vi) the time-limits allowed to interested parties for making
their views known.

22.3  Public notice shall be given of any preliminary or final
determination, whether affirmative or negative, of any decision to accept an
undertaking pursuant to Article 18, of the termination of such an
undertaking, and of the revocation of a determination.   Each such notice
shall set forth or otherwise make available through a separate report in
sufficient detail the findings and conclusions reached on all issues of fact
and law considered material by the investigating authorities.  All such
notices and reports shall  be forwarded to the Member or Members the
products of which are subject to such determination or undertaking and to
other interested parties known to have an interest therein.

22.4  A public notice of the imposition of provisional measures shall set
forth or otherwise make available through a separate report sufficiently
detailed explanations for the preliminary determinations on the existence of
a subsidy and injury and shall refer to the matters of fact and law which
have led to arguments being accepted or rejected.  Such a notice or report
shall, due regard being paid to the requirement for the protection of
confidential information, contain in particular:  (i) the names of the
suppliers or when this is impracticable, the supplying countries involved;
(ii) a description of the product which is sufficient for customs purposes;
(iii) the amount of subsidy established and the basis on which the existence
of a subsidy has been determined;  (iv) considerations relevant to the
injury determinations as set out in Article 15;  (v) the main reasons
leading to the determination.

22.5  A public notice of  conclusion or suspension of an investigation in
the case of an affirmative determination providing for the imposition of a
definitive duty or the acceptance of an undertaking shall contain or
otherwise make available through a separate report all relevant information
on the matters of fact and law and reasons which have led to the imposition
of final measures or the acceptance of an undertaking, due regard being paid
to the requirement for the protection of confidential information.  The
notice or report shall in particular contain the information described in
paragraph 4 above as well as the reasons for the acceptance or rejection of
relevant arguments or claims made by  the exporters and importers.

22.6  A public notice of the termination or suspension of an investigation
following the acceptance of an undertaking pursuant to Article 18 shall
include or otherwise make available through a separate report  the
non-confidential part of  this undertaking.

22.7  The provisions of this Article shall apply mutatis mutandis to the
initiation and completion of reviews pursuant to Article 21 and to decisions
under Article 20 to apply duties retroactively.


                               Article 23

                             Judicial Review


      Each Member, whose national legislation contains provisions on
countervailing  duty measures, shall maintain judicial, arbitral or
administrative tribunals or procedures for the purpose, inter alia, of the
prompt review of administrative actions relating to final determinations and
reviews of determinations within the meaning of Article 21 of this
Agreement.  Such tribunals or procedures shall be independent of the
authorities responsible for the determination or review in question, and
shall provide all interested parties who participated in the administrative
proceeding and are directly and individually affected by the administrative
actions with access to review.


                         PART VI:  INSTITUTIONS


                               Article 24

           Committee on Subsidies and Countervailing Measures
                       and other Subsidiary Bodies


24.1  There shall be established under this Agreement a Committee on
Subsidies and Countervailing Measures composed of representatives from each
of the Members.  The Committee shall elect its own Chairman and shall meet
not less than twice a year and otherwise as envisaged by relevant provisions
of this Agreement at the request of any Member.  The Committee shall carry
out responsibilities as assigned to it under this Agreement or by the
Members and it shall afford Members the opportunity of consulting on any
matter relating to the operation of the Agreement or the furtherance of its
objectives.   The MTO Secretariat shall act as the secretariat to the
Committee.

24.2  The Committee may set up subsidiary bodies as appropriate.

24.3  The Committee shall establish a Permanent Group of Experts composed of
five independent persons, highly qualified in the fields of subsidies and
trade relations.   The experts will be elected by the Committee and one of
them will serve in rotation every year.  The Committee may request the Group
of Experts to prepare a proposed conclusion on the existence of a prohibited
subsidy, as provided for in paragraph 5 of Article 4 above.   The Committee
may also seek an advisory opinion on the existence and nature of any
subsidy.

24.4  The Group of Experts may be consulted by any Member and give advisory
opinions on the nature of any subsidy proposed to be introduced or currently
maintained by that Member.   Such advisory opinions will be confidential and
may not be invoked in proceedings under Article 7 of this Agreement.

24.5  In carrying out their functions, the Committee and any subsidiary
bodies may consult with and seek information from any source they deem
appropriate.   However, before the Committee or a subsidiary body seeks such
information from a source within the jurisdiction of a Member, it shall
inform the Member involved.


                PART VII:  NOTIFICATION AND SURVEILLANCE


                               Article 25

                              Notifications


25.1  Members agree that, without prejudice to the provisions of paragraph 1
of Article XVI of the GATT 1994, their notifications of subsidies shall be
submitted not later than 30 June of each year and shall conform to the
provisions of paragraphs 2 through 6 below.

25.2  Members shall notify any subsidy as defined in paragraphs 1 and 2 of
Article 1 above, granted or maintained within their territory.

25.3  The content of notifications should be sufficiently specific to enable
other Members to evaluate the trade effects and to understand the operation
of notified subsidy programmes.   In this connection and without prejudice
to the contents and form of the questionnaire on subsidies[52], Members
shall ensure that their notifications contain the following information:

      (i)  form of a subsidy (i.e., grant, loan, tax concession, etc.);

      (ii) subsidy per unit or, in cases where it is not possible, the total
           amount or the annual amount budgeted for that subsidy
           (indicating, if possible, the average subsidy per unit in the
           previous year);

      (iii)policy objective and/or purpose of a subsidy;

      (iv) duration of a subsidy and/or any other time-limits attached to
           it;

      (v)  statistical data permitting an assessment of the trade effects of
           a subsidy.

25.4  Where specific points in paragraph 3 above have not been addressed in
a notification, an explanation shall be provided in the notification itself.

25.5  If subsidies are granted to specific products or sectors, the
notifications should be organized by product or sectors.

25.6  Members which consider that there are not measures or schemes in their
countries requiring notification under paragraph 1 of Article XVI of the
GATT 1994 and this Agreement shall so inform the  MTO Secretariat in
writing.

25.7  Members recognize that notification of a measure does not prejudge
either its legal status under the GATT 1994 and this Agreement, the effects
under this Agreement, or the nature of the measure itself.

25.8  Any Member may, at any time, make a written request for information on
the nature and extent of any subsidy granted or maintained by another Member
(including any subsidy referred to in Part IV above), or for explanation of
the reasons for which a specific measure has been considered as not
notifiable.

25.9  Members so requested shall provide such information as quickly as
possible and in a comprehensive manner, and shall be ready, upon request, to
provide additional information to the requesting Member.  In particular they
shall provide sufficient details to enable the other Member to assess their
compliance with the terms of this Agreement.   Any Member which considers
that such information has not been provided may bring the matter to the
attention of the Committee.

25.10 Any interested Member which considers that any practice of another
Member having the effects of a subsidy has not been notified in accordance
with the provisions of paragraph 1 of Article XVI of the GATT 1994 and this
Article may bring the matter to the attention of such other Member.   If the
alleged subsidy is not thereafter notified promptly, such Member may itself
bring the alleged subsidy in question to the notice of the Committee.

25.11 Members shall report without delay to the Committee all preliminary or
final actions taken with respect to countervailing duties.  Such reports
will be available in the MTO Secretariat for inspection by government
representatives.  The Members shall also submit, on a semi-annual basis,
reports on any countervailing duty actions taken within the preceding six
months.

25.12 Each Member shall notify the Committee (a) which of its authorities
are competent to initiate and conduct investigations referred to in Article
11 and (b) its domestic procedures governing the initiation and conduct of
such investigations.


                               Article 26

                              Surveillance


26.1  The Committee shall examine new and full notifications submitted under
paragraph 1 of Article XVI of the GATT 1994 and paragraph 1 of Article 25 of
this Agreement at special sessions held every third year.  Notifications
submitted in the intervening years (updating notifications) shall be
examined at each regular meeting of the Committee.

26.2  The Committee shall examine reports submitted under paragraph 11 of
Article 25 above at each regular meeting of the Committee.   The semi-annual
reports shall be submitted on an agreed standard form.


                 PART VIII:  DEVELOPING COUNTRY MEMBERS

                               Article 27

    Special and Differential Treatment for Developing Country Members


27.1  Members recognize that subsidies may play an important rôle in
economic development programmes of developing country Members.

27.2  The prohibition of paragraph 1(a) of Article 3 shall not apply to:

      (a)  developing country Members referred to in Annex VII.

      (b)  other developing country Members for eight years from the date of
           entry into force of the Agreement Establishing the MTO subject to
           compliance with the provisions in paragraph 3 below.

27.2bis  The prohibition of paragraph 1(b) of Article 3 shall not apply to
developing countries for a period of five years, and shall not apply to
least developed countries for a period of eight years, from the date of
entry into force of the Agreement Establishing the MTO.

27.3  Any developing country Member referred to in paragraph 2(b) above
shall phase out its export subsidies within the eight year period,
preferably in a progressive manner.  However, a developing country Member
shall not increase the level of its export subsidies[53], and shall
eliminate them within a period shorter than that provided for in this
provision when the use of such export subsidies is inconsistent with its
development needs.  If a developing country Member deems it necessary to
apply such subsidies beyond the eight year period, it shall not later than
one year before the expiry of this period enter into consultation with the
Committee, which will determine whether an extension of this period is
justified, after examining all the relevant economic, financial and
development needs of the Member in question.  If the Committee determines
that the extension is justified, the developing country Member concerned
shall hold annual consultations with the Committee to determine the
necessity of maintaining the subsidies.  If no such determination is made by
the Committee, the developing country Member shall phase out the remaining
export subsidies within two years from the end of the last authorized
period.

27.4  A developing country Member that has reached export competitiveness in
any given product shall phase out its export subsidies for such product(s),
over a period of two years.  However, for a country which is referred to in
Annex VII and which has reached export competitiveness in one or more
products, export subsidies on such products shall be gradually phased out
over a period of 8 years.
27.5  Export competitiveness in a product exists if a country's exports of
that product have reached a share of at least 3.25 per cent in world trade
of that product for two consecutive calendar years.  Export competitiveness
shall exist either (a) on the basis of notification by the country having
reached export competitiveness, or (b) on the basis of a computation
undertaken by the MTO Secretariat at the request of any Member.  For the
purpose of this paragraph a product is defined as a section heading of the
Harmonized System Nomenclature.  Members agree that the Committee shall
review the operation of this provision 5 years from the date of the entry
into force of  the Agreement Establishing the MTO.

27.6  Provisions of Article 4 shall not apply to a developing country Member
in the case of export subsidies which are in conformity with the provisions
of paragraphs 2 through 4 above.  The relevant provisions in such a case
shall be those of Article 7.

27.7  There shall be no presumption in terms of paragraph 1 of Article 6
that a subsidy granted by a developing country Member results in serious
prejudice, as defined in this Agreement.  Such serious prejudice where
applicable under the terms of paragraph 8 below, shall be demonstrated by
positive evidence, in accordance with the provisions of paragraphs 3 through
8 of Article 6.

27.8  Regarding actionable subsidies other than those referred to in
paragraph 1 of Article 6, action may not be authorized or taken under
Article 7 of this Agreement unless nullification or impairment of tariff
concessions or other obligations under the GATT 1994 is found to exist as a
result of such a subsidy, in such a way as to displace or impede imports of
like products into the market of the subsidizing country or unless injury to
domestic industry in the importing market of a Member occurs in terms of
Article 15 of this Agreement.

27.9  Any countervailing duty investigation of a product originating in a
developing Member shall be terminated as soon as the authorities concerned
determine that:

      (a)  the overall level of subsidies granted upon the product in
           question does not exceed 2 per cent of its value/calculated on a
           per unit basis;  or

      (b)  the volume of the subsidized imports represents less than 4 per
           cent of the total imports for the like product in the importing
           Member, unless imports from developing country Members whose
           individual shares of total import represent less than 4 per cent
           collectively account for more than 9 per cent of the total
           imports for the like product in the importing country.

27.10 For those Members within the scope of paragraph 2(b) of Article 27
which have eliminated export subsidies prior to the expiry of the period of
8 years from the entry into force of the Agreement Establishing the MTO and
those in Annex VII, the number in paragraph 9(a) shall be 3 per cent rather
than 2 per cent.  This provision shall apply from the date that this
elimination of export subsidies is notified to the Committee for so long as
export subsidies are not granted by the notifying Member.  This provision
shall expire 8 years from the date of entry into force of the Agreement
Establishing the MTO.

27.11 The provisions of paragraphs 9 and 10 shall govern any determination
of de minimis under paragraph 3 of Article 15 of this Agreement.

27.12 The provisions of Part III of this Agreement shall not be applicable
to direct forgiveness of debts, subsidies to cover social costs, in whatever
form, including relinquishment of government revenue and other transfer of
liabilities when such subsidies are granted within and directly linked to a
privatization programme of a developing country Member provided that both
such programme and the subsidies involved are granted for a limited period
and notified to the Committee and that the programme results in eventual
privatization of the enterprise concerned.

27.13 The Committee shall, upon request by an interested Member, undertake a
review of a specific export subsidy practice of a developing country Member
to examine whether the practice is in conformity with its development needs.

27.14 The Committee shall, upon request by an interested developing country
Member, undertake a review of a specific countervailing measure to examine
whether it is consistent with the provisions of paragraphs 9 and 10 above as
applicable to the developing country Member in question.


                   PART IX:  TRANSITIONAL ARRANGEMENTS

                               Article 28

                           Existing Programmes


28.1  Subsidy programmes that have been established within the territory of
any Member before the date on which such a Member signed the Agreement
Establishing the MTO and which are inconsistent with the provisions of this
Agreement shall be:

      (i)  notified to the Committee not later than 90 days after the entry
           into force of the Agreement Establishing the MTO for such Member;

      (ii) brought into conformity with the provisions of this Agreement
           within 3 years of the date of entry into force of the Agreement
           Establishing the MTO for such Member and until then shall not be
           subject to Part II of this Agreement.

28.2  No Member shall extend the scope of any such programme, nor shall such
a programme be renewed upon its expiration.


                               Article 29

                  Transformation into a Market Economy


29.1  Members in the process of transformation from a centrally-planned into
a market, free enterprise economy, may apply programmes and measures
necessary for such a transformation.

29.2  For such Members, subsidy programmes falling within the scope of
Article 3, and notified according to paragraph 3 below, shall be phased out
or brought into conformity with Article 3 within a period of 7 years from
the date of entry into force of the Agreement Establishing the MTO.  In such
a case, Article 4 shall not apply.  In addition during the same period:

      -    Subsidy programmes falling within the scope of paragraph 1(d) of
           Article 6 shall not be actionable under Article 7;

      -    With respect to other actionable subsidies, provisions of
           paragraph 8 of Article 27 shall apply.

29.3  Subsidy programmes falling within the scope of Article 3 shall be
notified to the Committee by the earliest practicable date after entry into
force of the Agreement Establishing the MTO.  Further notifications of such
subsidies may be made up to two years after entry into force of the
Agreement Establishing the MTO.

29.4  In exceptional circumstances Members may be given departures from
their notified programmes and measures and their time-frame by the Committee
if such departures are deemed necessary for the process of transformation.


                       PART X:  DISPUTE SETTLEMENT

                               Article 30


      The provisions of Articles XXII and XXIII of the GATT 1994 as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes shall apply to consultations and the
settlement of disputes under this Agreement, except as otherwise
specifically provided herein.


                       PART XI:  FINAL PROVISIONS

                               Article 31

                         Provisional Application


      The provisions of paragraph 1 of Article 6, and the provisions of
Article 8 and Article 9 shall apply for a period of 5 years, beginning with
the date of entry into force of the Agreement Establishing the MTO.  Not
later than 180 days before the end of this period, the Committee shall
review the operation of those provisions, with a view to determining whether
to extend their application, either as presently drafted or in a modified
form, for a further period.


                               Article 32

                         Other Final Provisions


32.1  No specific action against a subsidy of another Member can be taken
      except in accordance with the provisions of the GATT 1994, as
      interpreted by this Agreement.[54]

32.2  Reservations may not be entered in respect of any of the provisions of
      this Agreement without the consent of the other Members.

32.3  Subject to sub-paragraph 1, the provisions of this Agreement shall
apply to investigations, and reviews of existing measures, initiated
pursuant to applications which have been made on or after the date of entry
into force for a Member of the Agreement Establishing the MTO.

      32.3.1   For the purposes of paragraph 3 of Article 21, existing
      countervailing measures shall be deemed to be imposed on a date not
      later than the date of entry into force for a Member of the Agreement
      Establishing the MTO, except in cases in which the domestic
      legislation of a Member in force at that date already included a
      clause of the type provided for in that paragraph.

32.4  (a)  Each government accepting or acceding to the MTO shall take all
           necessary steps, of a general or particular character, to ensure,
           not later than the date of entry into force of the Agreement
           Establishing the MTO for it, the conformity of its laws,
           regulations and administrative procedures with the provisions of
           this Agreement as they may apply to the Member in question.

      (b)  Each Member shall inform the Committee of any changes in its laws
           and regulations relevant to this Agreement and in the
           administration of such laws and regulations.

32.5  The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereof.  The Committee
shall annually inform the Council for Trade in Goods of developments during
the period covered by such reviews.

32.6  The Annexes to this Agreement constitute an integral part thereof.
                                 ANNEX I

                  ILLUSTRATIVE LIST OF EXPORT SUBSIDIES


(a)   The provision by governments of direct subsidies to a firm or an
      industry contingent upon export performance.

(b)   Currency retention schemes or any similar practices which involve a
      bonus on exports.

(c)   Internal transport and freight charges on export shipments, provided
      or mandated by governments, on terms more favourable than for domestic
      shipments.

(d)   The provision by governments or their agencies either directly or
      indirectly through government-mandated schemes, of imported or
      domestic products or services for use in the production of exported
      goods, on terms or conditions more favourable than for provision of
      like or directly competitive products or services for use in the
      production of goods for domestic consumption, if (in the case of
      products) such terms or conditions are more favourable than those
      commercially available[55] on world markets to their exporters.

(e)   The full or partial exemption, remission, or deferral specifically
      related to exports, of direct taxes[56] or social welfare charges paid
      or payable by industrial or commercial enterprises.[57]

(f)   The allowance of special deductions directly related to exports or
      export performance, over and above those granted in respect to
      production for domestic consumption, in the calculation of the base on
      which direct taxes are charged.

(g)   The exemption or remission in respect of the production and
      distribution of exported products, of indirect taxes56 in excess of
      those levied in respect of the production and distribution of like
      products when sold for domestic consumption.

(h)   The exemption, remission or deferral of prior stage cumulative
      indirect taxes56 on goods or services used in the production of
      exported products in excess of the exemption, remission or deferral of
      like prior stage cumulative indirect taxes on goods or services used
      in the production of like products when sold for domestic consumption;
      provided, however, that prior stage cumulative indirect taxes may be
      exempted, remitted or deferred on exported products even when not
      exempted, remitted or deferred on like products when sold for domestic
      consumption, if the prior stage cumulative indirect taxes are levied
      on inputs that are consumed in the production of the exported product
      (making normal allowance for waste).[58]   This item shall be
      interpreted in accordance with the guidelines on consumption of inputs
      in the production process contained in Annex II.

(i)   The remission or drawback of import charges56 in excess of those
      levied on imported inputs that are consumed in the production of the
      exported product (making normal allowance for waste);  provided,
      however, that in particular cases a firm may use a quantity of home
      market inputs equal to, and having the same quality and
      characteristics as, the imported inputs as a substitute for them in
      order to benefit from this provision if the import and the
      corresponding export operations both occur within a reasonable time
      period, not to exceed two years.   This item shall be interpreted in
      accordance with the guidelines on consumption of inputs in the
      production process contained in Annex II and the guidelines in the
      determination of substitution drawback systems as export subsidies
      contained in Annex III.

(j)   The provision by governments (or special institutions controlled by
      governments) of export credit guarantee or insurance programmes, of
      insurance or guarantee programmes against increases in the cost of
      exported products or of exchange risk programmes, at premium rates
      which are inadequate to cover the long-term operating costs and losses
      of the programmes.

(k)   The grant by governments (or special institutions controlled by and/or
      acting under the authority of governments) of export credits at rates
      below those which they actually have to pay for the funds so employed
      (or would have to pay if they borrowed on international capital
      markets in order to obtain funds of the same maturity and other credit
      terms and denominated in the same currency as the export credit), or
      the payment by them of all or part of the costs incurred by exporters
      or financial institutions in obtaining credits, in so far as they are
      used to secure a material advantage in the field of export credit
      terms.

      Provided, however, that if a Member is a party to an international
      undertaking on official export credits to which at least twelve
      original Members to this Agreement are parties as of 1 January 1979
      (or a successor undertaking which has been adopted by those original
      Members), or if in practice a Member applies the interest rates
      provisions of the relevant undertaking, an export credit practice
      which is in conformity with those provisions shall not be considered
      an export subsidy prohibited by this Agreement.

(l)   Any other charge on the public account constituting an export subsidy
      in the sense of Article XVI of the GATT 1994.

                                ANNEX II


    GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS[59]

                                    I


1.    Indirect tax rebate schemes can allow for exemption, remission or
deferral of prior stage cumulative indirect taxes levied on inputs that are
consumed in the production of the exported product (making normal allowance
for waste).   Similarly, drawback schemes can allow for the remission or
drawback of import charges levied on inputs that are consumed in the
production of the exported product (making normal allowance for waste).

2.    The Illustrative List of Export Subsidies in Annex I of this Agreement
makes reference to the term "inputs that are consumed in the production of
the exported product" in paragraphs (h) and (i).  Pursuant to paragraph (h),
indirect tax rebate schemes can constitute an export subsidy to the extent
that they result in exemption, remission or deferral of prior stage
cumulative indirect taxes in excess of the amount of such taxes actually
levied on inputs that are consumed in the production of the exported
product.   Pursuant to paragraph (i), drawback schemes can constitute an
export subsidy to the extent that they result in a remission or drawback of
import charges in excess of those actually levied on inputs that are
consumed in the production of the exported product.   Both paragraphs
stipulate that normal allowance for waste must be made in findings regarding
consumption of inputs in the production of the exported product.   Paragraph
(i) also provides for substitution, where appropriate.

                                   II

      In examining whether inputs are consumed in the production of the
exported product, as part of a countervailing duty investigation pursuant to
this Agreement, investigating authorities should proceed on the following
basis:

1.    Where it is alleged that an indirect tax rebate scheme, or a drawback
scheme, conveys a subsidy by reason of over-rebate or excess drawback of
indirect taxes or import charges on inputs consumed in the production of the
exported product, the investigating authorities should first determine
whether the government of the exporting country has in place and applies a
system or procedure to confirm which inputs are consumed in the production
of the exported product and in what amounts.   Where such a system or
procedure is determined to be applied, the investigating authorities should
then examine the system or procedure to see whether it is reasonable,
effective for the purpose intended, and based on generally accepted
commercial practices in the country of export.   The investigating
authorities may deem it necessary to carry out, in accordance with paragraph
6 of Article 12 of this Agreement, certain practical tests in order to
verify information or to satisfy themselves that the system or procedure is
being effectively applied.

2.    Where there is no such system or procedure, where it is not
reasonable, or where it is instituted and considered reasonable but is found
not to be applied or not to be applied effectively, a further examination by
the exporting country based on the actual inputs involved would need to be
carried out in the context of determining whether an excess payment
occurred.   If the importing country deemed it necessary, a further
examination would be carried out in accordance with paragraph 1 above.

3.    Investigating authorities should treat inputs as physically
incorporated if such inputs are used in the production process and are
physically present in the product exported.   The Members note that an input
need not be present in the final product in the same form in which it
entered the production process.

4.    In determining the amount of a particular input that is consumed in
the production of the exported product, a "normal allowance for waste"
should be taken into account, and such waste should be treated as consumed
in the production of the exported product.   The term "waste" refers to that
portion of a given input which does not serve an independent function in the
production process, is not consumed in the production of the exported
product (for reasons such as inefficiencies) and is not recovered, used nor
sold by the same manufacturer.

5.    The investigating authority's determination of whether the claimed
allowance for waste is "normal" should take into account the production
process, the average experience of the industry in the country of export,
and other technical factors, as appropriate.   The investigating authority
should bear in mind that an important question is whether the authorities in
the exporting country have reasonably calculated the amount of waste, when
such an amount is intended to be included in the tax or duty rebate or
remission.



                                ANNEX III

             Guidelines in the Determination of Substitution
                  Drawback Systems as Export Subsidies


                                    I


      Drawback systems can allow for the refund or drawback of import
charges on inputs which are consumed in the production process of another
product and where the export of this latter product contains domestic inputs
having the same quality and characteristics as those substituted for the
imported inputs.  Pursuant to paragraph (i) of the Illustrative List of
Export Subsidies in Annex I of this Agreement  substitution drawback systems
can constitute an export subsidy to the extent that they result in an excess
drawback of the import charges levied initially on the imported inputs for
which drawback is being claimed.


                                   II

      In examining any substitution drawback system as part of a
countervailing duty investigation pursuant to this Agreement, investigating
authorities should proceed on the following basis:

1.    Paragraph (i) of the Illustrative List stipulates that home market
inputs may be substituted for imported inputs in the production of a product
for export provided such inputs are equal in quantity to, and have the same
quality and characteristics as, the imported inputs being substituted.   The
existence of a verification system or procedure is important because it
enables the government of the exporting country to ensure and demonstrate
that the quantity of inputs for which drawback is claimed does not exceed
the quantity of similar products exported, in whatever form, and that there
is not drawback of import charges in excess of those originally levied on
the imported inputs in question.

2.    Where it is alleged that a substitution drawback system conveys a
subsidy, the investigating authorities should first proceed to determine
whether the government of the exporting country has in place and applies a
verification system or procedure.   Where such a system or procedure is
determined to be applied, the investigating authorities should then examine
the verification procedures to see whether they are reasonable, effective
for the purpose intended, and based on generally accepted commercial
practices in the country of export.   To the extent that the procedures are
determined to meet this test and are effectively applied, no subsidy should
be presumed to exist.   It may be deemed necessary by the investigating
authorities to carry out, in accordance with paragraph 6 of Article 12 of
this Agreement, certain practical tests in order to verify information or to
satisfy themselves that the verification procedures are being effectively
applied.

3.    Where there are no verification procedures, where they are not
reasonable, or where such procedures are instituted and considered
reasonable but are found not to be actually applied or not applied
effectively, there may be a subsidy.   In such cases a further examination
by the exporting country based on the actual transactions involved would
need to be carried out to determine whether an excess payment occurred.   If
the importing country deemed it necessary a further examination would be
carried out in accordance with paragraph 2 above.

4.    The existence of a substitution drawback provision under which
exporters are allowed to select particular import shipments on which
drawback is claimed should not of itself be considered to convey a subsidy.

5.    An excess drawback of import charges in the sense of paragraph (i)
would be  deemed to exist where governments paid interest on any monies
refunded under their drawback schemes, to the extent of the interest
actually paid or payable.


                                ANNEX IV

            Calculation of the Total Ad Valorem Subsidization
                    (paragraph 1(a) of Article 6)[60]


1.    Any calculation of the amount of a subsidy for the purpose of
paragraph 1 of Article 6 above shall be done in terms of the cost to the
granting government.

2.    Except as provided in paragraphs 3-5, in determining whether the
overall rate of subsidization exceeds 5 per cent of the value of the
product, the value of the product shall be calculated as the total value of
the recipient firm's[61] sales in the most recent twelve-month period, for
which sales data is available, preceding the period in which the subsidy is
granted.[62]

3.    Where the subsidy is tied to the production or sale of a given
product, the value of the product shall be calculated as the total value of
the recipient firm's sales of that product in the most recent twelve-month
period, for which sales data is available, preceding the period in which the
subsidy is granted.

4.    Where the recipient firm is in a start-up situation, the overall rate
of subsidization shall not exceed 15 per cent of the total funds invested.
For purposes of this paragrapha start-up period will not extend beyond the
first year of production.[63]

5.    Where the recipient firm is located in an inflationary economy
country, the value of the product shall be calculated as the recipient
firm's total sales (or sales of the relevant product, if the subsidy is
tied) in the preceding calendar year indexed by the rate of inflation
experienced in the twelve months preceding the month in which the subsidy is
to be given.

6.    In determining the overall rate of subsidization in a given year,
subsidies given under different programmes and by different authorities in
the territory of a Member shall be aggregated.

7.    Subsidies granted prior to the entry into force of the Agreement
Establishing the MTO, the benefits of which are allocated to future
production, shall be included in the overall rate of subsidization.

8.    Subsidies which are non-actionable under relevant provisions of this
Agreement shall not be included in the calculation of the amount of a
subsidy for the purpose of paragraph 1 of Article 6 above.



                                 ANNEX V

   Procedures for Developing Information Concerning Serious Prejudice


1.    Every Member shall co-operate in the development of evidence to be
examined by the Committee or its subsidiary bodies in procedures under
Article 7 above, paragraphs 4 through 6.  The parties to the dispute and any
third-country Member concerned shall notify the Committee, as soon as the
provisions of paragraph 4 of Article 7 have been invoked, the organization
responsible for administration of this provision within its territory and
the procedures to be used to comply with requests for information.

2.    In cases where matters are referred to in the Committee under
paragraph 4 of Article 7, the Committee shall upon request, initiate the
procedure to obtain such information from the government of the subsidizing
Member as necessary to establish the existence and amount of subsidizations,
the value of total sales of the subsidized firms, as well as information
necessary to analyze the adverse effects caused by the subsidized
product.[64]  This process may include, where appropriate, presentation of
questions to the government of the subsidizing country and of the
complaining country to collect information, as well as to clarify and obtain
elaboration of information available to the parties to a dispute through the
notification procedures set forth in Part VII above.[65]

3.    In the case of effects in third-country markets, a Member party to a
dispute may collect information, including through the use of questions to
the government of the third-country, necessary to analyze adverse effects,
which is not otherwise reasonably available from the complaining Member or
the subsidizing Member.   This requirement should be administered in such a
way as not to impose an unreasonable burden on the third-country Member.
In particular, such a Member is not expected to make a market or price
analysis specially for that purpose.   The information to be supplied is
that which is already available or can be readily obtained by this Member
(e.g., most recent statistics which have already been gathered by relevant
statistical services but which have not yet been published, customs data
concerning imports and declared values of the products concerned, etc.).
However, if a Member party to a dispute undertakes a detailed market
analysis at its own expense, the task of the person or firm conducting such
an analysis shall be facilitated by the authorities of the third-country
Member and such a person or firm shall be given access to all information
which is not normally maintained confidential by the government.

4.    The Committee shall designate a representative to serve the function
of facilitating the information-gathering process.  The sole purpose of the
representative shall be to ensure the timely development of the information
necessary to facilitate expeditious subsequent multilateral review of the
dispute.  In particular, the representative may suggest ways to most
efficiently solicit necessary information as well as encourage the
co-operation of the parties.

5.    The information-gathering process outlined in paragraphs 2-4 above
shall be completed within 60 days of the date on which the matter has been
referred to the Committee under paragraph 4 of Article 7 above.  The
information obtained during this process shall be submitted to the Committee
or to a panel established by the Committee in accordance with the provisions
of Part X above.  This information should include, inter alia, data
concerning the amount of the subsidy in question (and, where appropriate,
the value of total sales of the subsidized firms), prices of the subsidized
product, prices of the non-subsidized product, prices of other suppliers to
the market, changes in the supply of the subsidized product to the market in
question and changes in market shares.  It should also include rebuttal
evidence, as well as such supplemental information as the Committee or the
panel deems relevant in the course of reaching its conclusions.

6.    If the subsidizing and/or third-country Member fail to co-operate in
the information-gathering process, the complaining Member will present its
case of serious prejudice, based on evidence available to it, together with
facts and circumstances of the non co-operation of the subsidizing and/or
third-country Member.   Where information is unavailable due to non
co-operation by the subsidizing and/or third-country Member, the Committee
or the panel may complete the record as necessary relying on best
information otherwise available.

7.    In making its determination, the Committee or the panel should draw
adverse inferences from instances of non co-operation by any party involved
in the information-gathering process.

8.    In making a determination to use either best information available or
adverse inferences, the Committee or the panel shall consider the advice of
the Committee representative nominated under paragraph 4 above as to the
reasonableness of any requests for information and the efforts made by
parties to comply with these requests in a co-operative and timely manner.

9.    Nothing in the information-gathering process shall limit the ability
of the Committee or the panel to seek such additional information it deems
essential to a proper resolution to the dispute, and which was not
adequately sought or developed during that process.   However, ordinarily
the panel should not request additional information to complete the record
where the information would support a particular party's position and the
absence of that information in the record is the result of unreasonable non
co-operation by that party in the information-gathering process.


                                ANNEX VI

          Procedures for On-The-Spot Investigations Pursuant to
                        Paragraph 6 of Article 12


(a)   Upon initiation of an investigation, the authorities of the exporting
      country and the firms known to be concerned should be informed of the
      intention to carry out on-the-spot investigations.

(b)   If in exceptional circumstances it is intended to include
      non-governmental experts in the investigating team, the firms and the
      authorities of the exporting country should be so informed.  Such
      non-governmental experts should be subject to effective sanctions for
      breach of confidentiality requirements.

(c)   It should be standard practice to obtain explicit agreement of the
      firms concerned in the exporting country before the visit is finally
      scheduled.

(d)   As soon as the agreement of the firms concerned has been obtained the
      investigating authorities should notify the authorities of the
      exporting country of the names and addresses of the firms to be
      visited and the dates agreed.

(e)   Sufficient advance notice should be given to the firms in question
      before the visit is made.

(f)   Visits to explain the questionnaire should only be made at the request
      of an exporting firm.  In case of such a request the investigating
      authorities may place themselves at the disposal of the firm;  such a
      visit may only be made, provided the authorities of the importing
      country notify the representatives of the government of the country in
      question and unless the latter do not object to the visit.

(g)   As the main purpose of the on-the-spot investigation is to verify
      information provided or to obtain further details, it should be
      carried out after the response to the questionnaire has been received
      unless the firm agrees to the contrary and the government of the
      exporting country is informed by the investigating authorities of the
      anticipated visit and does not object to it;  further, it should be
      standard practice prior to the visit to advise the firms concerned of
      the general nature of the information to be verified and of any
      further information which needs to be provided, though this should not
      preclude requests to be made on the spot for further details to be
      provided in the light of information obtained.

(h)   Enquiries or questions put by the authorities or firms of the
      exporting countries and essential to a successful on-the-spot
      investigation should, whenever possible, be answered before the visit
      is made.


                                ANNEX VII

                 Developing Country Members Referred to
                     in Paragraph 2(a) of Article 27


      The developing country Member not subject to the provisions of
paragraph 1(a) of Article 3 under the terms of  paragraph 2(a) of Article 27
are:

(a)   Least-developed countries designated as such by the United Nations
      that are Members of the MTO.

(b)   Each of the following developing country Members shall be subject to
      the provisions which are applicable to other developing country
      Members according to paragraph 2(b) of Article 27 when GNP per capita
      has reached $1,000 per annum:  Bolivia, Cameroon, Congo, Côte
      d'Ivoire, Dominican Republic, Egypt, Ghana, Guatemala, Guyana, India,
      Indonesia, Kenya, Morocco, Nicaragua, Nigeria, Pakistan, Philippines,
      Senegal, Sri Lanka and Zimbabwe.

Note:  The inclusion of countries in the list in (b) is based on the most
recent data from the World Bank on GNP per capita.



1. In accordance with the provisions of Article XVI of the GATT 1994 (Note
to Article XVI) and the provisions of Annexes I through III of this
Agreement, the exemption of an exported producted from duties or taxes borne
by the like product when destined for domestic consumption, or the remission
of such duties or taxes in amount not in excess of those which have accrued,
shall not be deemed to be a subsidy.

2. Objective criteria or conditions, as used herein, mean criteria or
conditions which are neutral, which do not favour certain enterprises over
others, and which are economic in nature and horizontal in application  such
as number of employees or size of enterprise.


3. In this regard, information on the frequency with which applications for
a subsidy are refused or approved and the reasons for such decisions shall,
in particular, be considered.

4. This standard is met when the facts demonstrate that the granting of a
subsidy, without having been made legally contingent upon export
performance, is in fact tied to actual or anticipated exportation or export
earnings.  The mere fact that a subsidy is accorded to enterprises which
export shall not for that reason alone be considered to be an export subsidy
within the meaning of this provision.

5. Measures referred to in Annex I as not constituting export subsidies
shall not be prohibited under this or any other provision of this Agreement.

6. Any time periods mentioned in this Article may be extended by mutual
agreement.

7. As established in the Agreement Establishing the MTO and hereinafter
referred to as the DSB.

8. If a meeting of the DSB is not scheduled during this period, such a
meeting of the DSB shall be held for this purpose.

9. This expression is not meant to allow countermeasures that are
disproportionate in light of the fact that the subsidies dealt with under
these provisions are prohibited.

10. This expression is not meant to allow countermeasures that are
disproportionate in light of the fact that the subsidies dealt with under
these provisions are prohibited.

11. Injury to the domestic industry is used here in the same sense as it is
used in Part V of this Agreement.

12. Nullification or impairment is used in this Agreement in the same sense
as it is used in the relevant provisions of the  GATT 1994, and the
existence of such nullification or impairment shall be established in
accordance with the practice of application of these provisions.

13. Serious prejudice to the interests of another  Member is used in this
Agreement in the same sense as it is used in Article XVI:1 of the GATT 1994,
and includes threat of serious prejudice.

14. The total ad valorem subsidization shall be calculated in accordance
with the provisions of Annex IV.

15. Since it is anticipated that civil aircraft will be subject to specific
multilateral rules, the threshold in this sub-paragraph does not apply to
civil aircraft.

16. Members recognize that, where royalty-based financing for a civil
aircraft programme is not being fully repaid due to the level of actual
sales falling below the level of forecast sales, this does not in itself
constitute serious prejudice for the purposes of this sub-paragraph.

17. Unless other multilaterally agreed specific rules apply to the trade in
the product or commodity in question.

18. The fact that certain circumstances are referred to in this paragraph
does not, in itself, confer upon them any legal status in terms of either
the GATT 1994 or this Agreement.  These circumstances must not be isolated,
sporadic or otherwise insignificant.

19. In the event that the request relates to a subsidy deemed to result in
serious prejudice in terms of Article 6.1 above, the available evidence of
serious prejudice may be limited to the available evidence as to whether the
conditions of Article 6.1 have been met or not.

20. Any time periods mentioned in this Article may be extended by mutual
agreement.

21. If a meeting of the DSB is not scheduled during this period, such a
meeting of the DSB shall be held for this purpose.

22. If a meeting of the DSB is not scheduled during this period, such a
meeting of the DSB shall be held for this purpose.

23. It is recognized that government assistance for various purposes is
widely provided by Members and the mere fact that such assistance may not
qualify for non-actionable treatment under the provisions of this Article
does not in itself restrict the ability of Members to provide such
assistance.

24. Since it is anticipated that civil aircraft will be subject to specific
multilateral rules, the provisions of this sub-paragraph do not apply to
that product.  Not later than 18 months after the date of entry into force
of the Agreement Establishing the MTO the Committee shall review the
operation of the provisions of this sub-paragraph with a view to making all
necessary modifications to improve the operation of these provisions.  In
its consideration of possible modifications, the Committee shall carefully
review the definitions of the categories set forth in this sub-paragraph in
the light of the experience of Members in the operation of research
programmes and the work in other relevant international institutions.  The
provisions of this Agreement do not apply to fundamental research activities
independently conducted by higher education or research establishments.  The
term "fundamental research" means an enlargement of general scientific and
technical knowledge not linked to industrial or commercial objectives.

25. In the case of programmes which span "industrial research" and
"pre-competitive development activity", the allowable level of
non-actionable assistance shall not exceed the simple average of the
allowable levels of non-actionable assistance applicable to the above two
categories, calculated on the basis of all eligible costs as set forth in
items (i)-(v) of this sub-paragraph.

26. The allowable levels of non-actionable assistance referred to in this
sub-paragraph shall be established by reference to the total eligible costs
incurred over the duration of an individual project.

27. The term "industrial research" means planned search or critical
investigation aimed at discovery of new knowledge, with the objective that
such knowledge may be useful in developing new products, processes or
services, or in bringing about a significant improvement to existing
products, processes or services.

28. The term "pre-competitive development activity" means  the translation
of industrial research findings into a plan, blueprint or design for new,
modified or improved products, processes or services whether intended for
sale or use, including the creation of a first prototype which would not be
capable of commercial use.  It may further include the conceptual
formulation and design of products, processes or services alternatives and
initial demonstration or pilot projects, provided that these same projects
cannot be converted or used for industrial application or commercial
exploitation.  It does not include routine or periodic alterations to
existing products, production lines, manufacturing processes, services, and
other on-going operations even though those alterations may represent
improvements.

29. A "general framework of regional development" means that regional
subsidy programmes are part of an internally consistent and generally
applicable regional development policy and that regional development
subsidies are not granted in isolated geographical points having no, or
virtually no influence on the development of a region.

30."Neutral and objective criteria" means criteria which do not favour
certain regions beyond what is appropriate for the elimination or reduction
of regional disparities within the framework of the regional development
policy.  In this regard, regional subsidy programmes shall include ceilings
on the amount of assistance which can be granted to each subsidized project.
Such ceilings must be differentiated according to the different levels of
development of assisted regions and must be expressed in terms of investment
costs or cost of job creation.  Within such ceilings, the distribution of
assistance shall be sufficiently broad and even to avoid the predominant use
of a subsidy  by, or the granting of disproportionately large amounts of
subsidy to, certain enterprises as provided for in Article 2 of this
Agreement.

31. The term "existing facilities" means facilities having been in operation
for at least two years at the time when new environmental requirements are
imposed.

32. It is recognized that nothing in this notification provision requires
the provision of confidential information, including confidential business
information.

33. The provisions of Parts II or III may be invoked in parallel with the
provisions of Part V of this Agreement;  however, with regard to the effects
of a particular subsidy in the domestic market of the importing country,
only one form of relief (either a countervailing duty, if other requirements
of Part V are met, or a countermeasure under Articles 4 or 7 of this
Agreement) shall be available.   The provisions of Parts III and V shall not
be invoked regarding measures considered non-actionable in accordance with
the provisions of Part IV of this Agreement.   However, measures referred to
in Article 8.1(a) above may be investigated in order to determine whether or
not they are  specific within the meaning of Article 2 above.  In addition,
in the case of a subsidy referred to in paragraph 2 of Article 8 conferred
pursuant to a programme which has not been notified in accordance with
paragraph 3 of Article 8, the provisions of Parts III or V may be invoked,
but such subsidy shall be treated as non-actionable if it is found to
conform to the standards set forth in paragraph 2 of Article 8.

34. The term "countervailing duty" shall be understood to mean a special
duty levied for the purpose of off-setting any subsidy bestowed directly or
indirectly upon the manufacture, production or export of any merchandise, as
provided for in Article VI:3 of the GATT 1994.

35. The term "initiated" as used hereinafter means procedural action by
which a  Member formally commences an investigation as provided in Article
11.


36. In the case of fragmented industries involving an exceptionally large
number of producers, authorities may determine support and opposition by
using statistically valid sampling techniques.

37. Members are aware that in the territory of certain Members, employees of
domestic producers of the like product or representatives of those
employees, may make or support an application for an investigation under
paragraph 1.

38. As a general rule, the time limit for exporters shall be counted from
the date of receipt of the questionnaire, which for this purpose shall be
deemed to have been received one week from the day on which it was sent to
the respondent or transmitted to the appropriate diplomatic representatives
of the exporting country or in the case of a separate customs territory
Member of the MTO, an official representative of the exporting territory.

39. It being understood that where  the number of exporters involved is
particularly high, the full  text of the application should instead be
provided only to the authorities of the exporting country  or to the
relevant trade association who then should forward copies to the exporters
concerned.

40. Members are aware that in the territory of certain Members disclosure
pursuant to a narrowly-drawn protective order may be required.

41. Members agree that requests for confidentiality should not be
arbitrarily rejected.   Members further agree that the investigating
authority may request the waiving of confidentiality only regarding
information relevant to the proceedings.

42. It is particularly important, in accordance with the provisions of this
paragraph, that no affirmative determination whether preliminary or final be
made without reasonable opportunity for consultations having been given.
Such consultations may establish the basis for proceeding under the
provisions of Parts II,  III and X of this Agreement.

43. Under this Agreement the term "injury" shall, unless otherwise
specified, be taken to mean material injury to a domestic industry, threat
of material injury to a domestic industry or material retardation of the
establishment of such an industry and shall be interpreted in accordance
with the provisions of this Article.

44. Throughout this Agreement the term "like product" ("produit similaire")
shall be interpreted to mean a product which is identical, i.e., alike in
all respects to the product under consideration, or in the absence of such a
product, another product which although not alike in all respects, has
characteristics closely resembling those of the product under consideration.

45. As set forth in paragraphs 2 and 4 of this Article.

46. For the purpose of this paragraph, producers shall be deemed to be
related to exporters or importers only if (a) one of them directly or
indirectly controls the other;  or (b) both of them are directly or
indirectly controlled by a third person;  or (c) together they directly or
indirectly control a third person, provided that there are grounds for
believing or suspecting that the effect of the relationship is such as to
cause the producer concerned to behave differently from non-related
producers.  For the purpose of this paragraph, one shall be deemed to
control another when the former is legally or operationally in a position to
exercise restraint or direction over the latter.

47. The word "may" shall not be interpreted to allow the simultaneous
continuation of proceedings with the implementation of  undertakings, except
as provided in paragraph 4 of this Article.

48. For the purpose of this paragraph, the term "domestic interested
parties" shall include consumers and industrial users of the imported
product subject to investigation.

49. As used in this Agreement "levy" shall mean the definitive or final
legal assessment or collection of a duty or tax.

50. When the amount of the countervailing duty is assessed on a
retrospective basis, a finding in the most recent assessment proceeding that
no duty is to be levied shall not by itself require the authorities to
terminate the definitive duty.

51. Where authorities provide information and explanations under the
provisions of this Article in a separate report, they shall ensure that such
report is readily available to the public.

52. The Committee shall establish a Working Party to review the contents and
form of the questionnaire as contained in BISD, 9S/193-194.

53. For countries not granting export subsidies as of the day of entry into
force of the Agreement establishing the MTO, this provision shall apply on
the basis of the level of export subsidies granted in 1986.

54. This paragraph is not intended to preclude action under other relevant
provisions of the GATT 1994, where appropriate.

55. The term "commercially available" means that the choice between domestic
and imported products is unrestricted and depends only on commercial
considerations.

56. For the purpose of this Agreement:
      The term "direct taxes" shall mean taxes on wages, profits, interests,
rents, royalties, and all other forms of income, and taxes on the ownership
of real property;
      The term "import charges" shall mean tariffs, duties, and other fiscal
charges not elsewhere enumerated in this note that are levied on imports;
      The term "indirect taxes" shall mean sales, excise, turnover, value
added, franchise, stamp, transfer, inventory and equipment taxes, border
taxes and all taxes other than direct taxes and import charges;
      "Prior stage" indirect taxes are those levied on goods or services
used directly or indirectly in making the product;
      "Cumulative" indirect taxes are multi-staged taxes levied where there
is no mechanism for subsequent crediting of the tax if the goods or services
subject to tax at one stage of production are used in a succeeding stage of
production;
      "Remission" of taxes includes the refund or rebate of taxes;
      "Remission or drawback" includes the full or partial exemption or
deferral of import charges.

57. The Members recognize that deferral need not amount to an export subsidy
where, for example, appropriate interest charges are collected.  The Members
reaffirm the principle that prices for goods in transactions between
exporting enterprises and foreign buyers under their or under the same
control should for tax purposes be the prices which would be charged between
independent enterprises acting at arm's length.   Any Member may draw the
attention of another Member to administrative or other practices which may
contravene this principle and which result in a significant saving of direct
taxes in export transactions.   In such circumstances the Members shall
normally attempt to resolve their differences using the facilities of
existing bilateral tax treaties or other specific international mechanisms,
without prejudice to the rights and obligations of Members under the GATT
1994, including the right of consultation created in the preceding sentence.
      Paragraph (e) is not intended to limit a Member from taking measures
to avoid the double taxation of foreign source income earned by its
enterprises or the enterprises of another Member.

58. Paragraph (h) does not apply to value-added tax systems and border-tax
adjustment in lieu thereof;  the problem of the excessive remission of
value-added taxes is exclusively covered by paragraph (g).

59. Inputs consumed in the production process are inputs physically
incorporated, energy, fuels and oil used in the production process and
catalysts which are consumed in the course of their use to obtain the
exported product.

60. An understanding among Members should be developed, as necessary, on
matters which are not specified in this Annex or which need further
clarification for the purposes of paragraph 1(a) of Article 6.

61. The recipient firm is a firm in the subsidizing country.

62. In the case of tax related subsidies the value of the product shall be
calculated as the total value of the recipient firm's sales in the fiscal
year in which the tax related measure was earned.

63. Start-up situations include instances where financial commitments for
product development or construction of facilities to manufacture products
benefiting from the subsidy have been made, even though production has not
begun.

64. In cases where the existence of serious prejudice has to be
demonstrated.

65. The information gathering process by the Committee shall take into
account the need to protect information which is by nature confidential or
which is provided on a confidential basis by any Member involved in this
process.